Aris Cahyadi – The beef import scandal that has rocked a major political party involved six different forms of corruption, antigraft investigators have revealed.
"The first method was through embezzlement of imported beef," Busyro Muqoddas, the deputy chairman of the Corruption Eradication Commission (KPK), said at the KPK office late on Tuesday. He added that the case was also rife with instances of fictitious importation and bribery of officials.
The three other alleged offenses were improper import procedures, misuse of funds to buy cattle feed, and cartel-like practices in the local livestock industry.
"The KPK based these findings on complaints filed with us by the public from the period of 2005 to 2012, in relation to the alleged beef commodity graft," Busyro said, adding that this instance of corruption prevented the government from achieving its beef self-sufficiency program goal, launched in 2000.
The government allocated a total of Rp 18.7 trillion ($1.9 billion) between 2004 and 2009 for programs to achieve self-sufficiency in beef and buffalo meat.
Dradjad Wibowo, an economist who is also the deputy chairman of the National Mandate Party (PAN), recently said that 12 beef import companies, including Indoguna Utama, teamed up to evade tax payments and use the funds saved to bribe lawmakers and customs and excise officials.
Indoguna Utama directors were last month caught paying bribes allegedly intended for former Prosperous Justice Party (PKS) president Luthfi Hasan Ishaaq.
Dradjad said he had conducted an investigation based on unpublished data from state institutions that showed most of the 12 companies involved in illegal practices were new players in the beef import industry.
"By using all sorts of excuses, the import 'mafia' was able to enjoy a VAT [value-added tax] exemption for the beef imports," he said. "As a result, the state incurred Rp 546 billion [$56.5 million] in VAT losses from beef and gizzards for the January 2010-July 2011 period."
The amount of VAT that should have been paid was Rp 548.8 billion, he said. "Out of that figure, only Rp 2.8 billion was paid to the state. The remaining Rp 546 billion was exempted, which means the importers received an additional profit," Dradjad said.
The exempted VAT amount matched the fee the importers paid to the people who "helped" them.
"In other words, you could say that the fees or bribes paid to political parties and non-party officials were paid from the exempted VAT," he said. "The law enforcers should start investigating... the VAT exemption.
The second source of funds used to pay the fee was said to be falsely labeling meat as gizzards, he said.
Dradjad said that based on regulations, importers had to pay an import duty of 5 percent of the customs value of the imported goods. That value is calculated based on the cost price, insurance and freight (CIF), or a benchmark value set by the Directorate General of Customs and Excise.
Since the CIF for gizzards is cheaper than that of beef, recalcitrant importers allegedly reported that they were importing gizzards instead of beef.
Meanwhile, the KPK questioned Agriculture Minister Suswono, a PKS member, on Monday as a witness against four people charged with corruption in the awarding of beef import contracts by the Agriculture Ministry, including Luthfi.